Right to Manage: Whether an appellant had been given fair opportunity to respond to an RTM application where documents were supplied late (Assethold Ltd v 63 Holmes Road (London) RTM Co Ltd – 2020)
Where an RTM company failed to respond to a landlord’s request for further information and documents were subsequently supplied late during the course of proceedings, was determination by the FTT unfair and had the landlord been given adequate opportunity to respond to the documents supplied?
In Assethold Ltd v 63 Holmes Road (London) RTM Co Ltd , the landlord of a block of flats received a notice from the respondent RTM company of its claim to acquire rights to manage the block. Ten qualifying tenants at the block comprised the RTM company. The landlord requested further information the following day from the respondent in order to allow it to consider the claim. No response was received from the RTM company, nor was any response received following several chasers. Nevertheless, and despite an absence of the relevant information requested, the landlord’s solicitors served a counter-notice stating grounds on which the RTM company was not entitled to acquire the right to manage
Under s84(2) of the Commonhold and Leasehold Reform Act 2002, the landlord was required to state specific reasons why the applicant RTM company was not entitled to acquire rights. This statutory provision assumes that the recipient of a claim notice has sufficient information available to it to make a full assessment. Following service of the counter-notice, the RTM applied to the FTT for determination as to its entitlement. In the landlord’s statement of case, it advised that the RTM company had not responded to requests for information. In a reply and further statement of case from the RTM company, the documents the landlord had been requesting were provided along with an explanation as to why they hadn’t been supplied when requested.
The landlord’s solicitors requested an opportunity to respond, which was refused. The landlord submitted a renewed request to the FTT panel, and it was concluded that the RTM company had not evidenced any procedural error and the landlord's challenges to the application were dismissed. The landlord appealed to the Upper Tribunal on the basis that it had not been given a fair opportunity to answer the RTM company’s statement of case.
The Upper Tribunal found in favour of the landlord.
The landlord’s argument centred on the FTT’s approach, finding it did not give the landlord opportunity to respond to the case presented by the RTM company either by way of a hearing or production of evidence. Further, the FTT had not addressed the RTM company’s failure to supply information requested.
The FTT is required to deal with cases fairly and justly, and parties are required to assist the FTT in meeting this objective through cooperation. The RTM company, in this case, was required to evidence its entitlement to acquire rights to manage and the landlord entitled to be given an adequate opportunity to respond. In this case, the FTT had reached its own decision that the documents supplied evidenced entitlement to acquire rights to manage, but had not allowed the landlord to respond or offer evidence to the contrary.
The landlord had not been given a fair opportunity to put forward a case in response, and the Upper Tribunal allowed the landlord 14 days to respond to the documents supplied by the RTM company, following which the appeal would either be dismissed if no grounds to challenge the RTM company’s entitlement could be found, or otherwise further consideration given to the application if the claim was capable of challenging.
Advice and action for landlords
Providing reassurance for landlords, this case supports respondent parties where RTM companies fail to supply sufficient information to consider an RTM claim, ensuring that fair procedure is followed and landlords are given adequate opportunity to consider new information.
It is fair and reasonable that an RTM company should not benefit from a failure to supply documents, and equally reasonable that the Tribunal considers both sides of a claim.
The Upper Tribunal found in favour of the landlord, which had not been given fair opportunity by the FTT to put forward a case in response. It is fair and reasonable that the Tribunal considers cases from both parties to a claim.